Skip to content

Bankman-Fried Pleads Not Guilty as US Regulators Warn Banks

Steve Miley trader
Updated 4 Jan 2023

Sam Bankman-Fried, the former CEO of FTX, the collapsed cryptocurrency exchange, has officially denied charges that he defrauded investors and customers. In the wake of the collapse of FTX, US watchdogs and regulators have this week told financial institutions to be wary of the risks accompanying the crypto market.

new-recommended-broker-banner

YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Former FTX CEO Pleads Not Guilty

Sam Bankman-Fried, or SBF, the 30-year-old former billionaire and founder of the now collapsed crypto exchange, FTX, pleaded not guilty to criminal charges Tuesday in the US District Court in New York. Bankman-Fried sat between his lawyers, Christian Everdell and Mark Cohen, as a trial date for October 2nd 2023, was set by US District Judge Lewis Kaplan. US prosecutors said they anticipate producing all evidence for the case in the next four weeks. The not-guilty plea means a likely lengthy trial, which could last at least four weeks and will probably be one of the highest-profile, white-collar fraud cases in recent years.

Top Broker Recommendation

YOUR CAPITAL IS AT RISK. 68% OF RETAIL CFD ACCOUNTS LOSE MONEY

In December, SBF was previously granted a $250 million bail package by magistrate judge, co-signed by his parents. On Tuesday, Bankman-Fried requested that Judge Kaplan keep confidential the identities of two people who will help him secure bail, as SBF’s parents had received threats, which Judge Kaplan granted.

The Downfall of SBF: A Recent Timeline

Sam Bankman-Fried founded FTX in 2019, and it grew to be the world’s second-largest cryptocurrency exchange. In November, leaked reports and rumours of unstable finances saw a wave of customer withdrawals. This then forced FTX to declare bankruptcy, and in the process, revealed billions of dollars of missing funds.

Federal prosecutors then stated that the collapse was a result of “intentional fraud,” and in December, Bankman-Fried was arrested in the Bahamas, where FTX was based and where he lived. SBT was quickly extradited to the US, where he was soon freed on a $250m bail package.

US Watchdogs Warn Banks on Crypto

In developments associated with the collapse of FTX, the US Federal Reserve, the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation issued their first-ever joint warning to banks over the risks posed by the crypto market, and said they were closely examining banking organisations with regard to any of their cryptocurrency activities.

In the joint statement, the aforementioned regulators stated, “The events of the past year have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector,” adding, “It is important that risks related to the crypto-asset sector that cannot be mitigated or controlled do not migrate to the banking system.”


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Steve has 29 years of financial market experience including 3 years at Credit Suisse and 15 years at Merril Lynch. Steve is the Academic Dean for The London School of Wealth Management and has won many awards from Technical Analyst Magazine.